Wasabi Protocol Loses $4.5 Million in Apparent Admin Key Breach

The DeFi sector continues to experience significant losses, with Wasabi Protocol being the latest victim. On Thursday, the protocol, which is a perpetuals trading platform built on Ethereum and Base, was drained of approximately $4.55 million after its deployer key was compromised, according to security firm Blockaid. This incident is the latest in a series of DeFi losses this month, totaling over $605 million across at least 12 incidents. The attack bears a striking resemblance to the Drift Protocol exploit, where North Korea-linked attackers used a compromised admin key to drain $285 million from the Solana-based perpetuals exchange. The breach was made possible through an externally owned account called wasabideployer.eth, which held the sole admin role in Wasabi's permission system. Once the attacker gained access to the deployer key, they granted themselves admin privileges without delay by calling grantRole on the permission contract. The attacker then used a helper contract to upgrade Wasabi's perp vaults and Long Pool to malicious implementations, resulting in the draining of balances, as reported by Blockaid. The exploit utilized the Universal Upgradeable Proxy Standard (UUPS), a widely used standard that allows smart contracts to change their underlying code while maintaining the same address. However, this standard also poses a risk if an attacker gains control of admin permissions, as they can replace the contract's logic with malicious code designed to steal funds. Wasabi's lack of a timelock or multisig to protect the admin role made it vulnerable to this type of attack. A timelock would have forced a delay between the announcement and execution of admin actions, giving users time to react, while a multisig would have required multiple signers to approve changes. The absence of these security measures left a single key in control of the protocol. Blockaid's exploit detection system identified the ongoing admin-key compromise exploit on Wasabi Protocol across Ethereum and Base. The compromised contracts include Wasabi's wWETH, sUSDC, wBITCOIN, wPEPE, and Long Pool vaults on Ethereum, as well as its sUSDC, wWETH, sBTC, sVIRTUAL, sAERO, and sBRETT vaults on Base. Users holding Wasabi LP tokens were advised to revoke any active approvals to the vault contracts, as the underlying assets backing those tokens had either been drained or remained at risk. This incident is part of a larger trend of DeFi exploits this month, with cumulative losses exceeding $770 million across over 30 reported incidents. The majority of these losses occurred in April, with smaller breaches hitting CoW Swap, Grinex, Resolv Labs, and Volo Protocol, among others. A common thread among these incidents is the lack of implementation of lessons learned from previous exploits, leading to repeated vulnerabilities. Wasabi Protocol has not yet released a public statement regarding the incident.